|VASEP’s goal of increasing seafood exports by a good 10 per cent may be hard to reach. Photo: Le Toan |
This year, the Vietnam Association of Seafood Exporters and Producers (VASEP) forecast that the country’s seafood exports may grow by 10 per cent compared to 2019, reaching $9.4 billion, higher than the average growth rate of 6.8 per cent in the last few years. However, the disruption of global supply chains, the resurgences of COVID-19 in the country, and problems related to official regulations are creating more challenges for the seafood industry that could threaten this target.
Mekong Seafood JSC now only plans to not incur any further losses, according to a representative of this company. The company’s net revenue in the first quarter of 2021 has decreased by 27 per cent compared to the same period last year, pushing it into a state of loss during the last four quarters. On March 18, the Ho Chi Minh Stock Exchange put the company’s shares on alert due to a loss after tax in 2020 of nearly $520,000 and accumulated loss $87,000 at the end of that year.
Despite the company’s goal, losses may remain unavoidable if the Ministry of Agriculture and Rural Development (MARD) applies the new safety and quarantine regulations on imported seafood. In that case, all imported products for further export processing will be inspected for records, financial statements, with the inspection time most likely affecting business sales.
More hurdles to overcome
During the complicated global health crisis, Tran Van Lap, chairman of the Board of Directors of Loc Kim Chi Seafood JSC, remains concerned that costs will increase if the quarantine list for seafood products expands, with businesses likely to encounter more difficulties in balancing time and costs. Lap’s concern may become reality when the MARD sticks to publishing the new circular which would replace its Circular No.15/2018/TT-BNNPTNT dated October 29, 2018 on promulgating HS codes of commodities under the ministry’s management. Whereas Circular 15 still allowed animal-based products to be exempted from quarantine measures, the new one, which is under discussion now, would likely require all such products to undergo these safety procedures.
According to the Law on Veterinary Medicine, imported goods subject to animal quarantine include terrestrial and aquatic animal products. Article 3 of the law states that animal products only include parts and parts of the body of animals and aquatic animals. The law, however, does not stipulate that products processed from animal products or parts thereof are subject to quarantine.
Meanwhile, the Law on Food Safety on also only stipulates that fresh food derived from animals must have a veterinary hygiene certificate from a respective agency. For pre-packaged processed foods, only the declaration of conformity with the competent state agency must be registered before being circulated on the market.
In its latest documents, VASEP commented on the new draft circular that the maintenance and expansion of the list of processed goods subject to quarantine is excessive and unnecessary. In addition, it would not be consistent with the policy of reducing the list of goods subject to specialised industry inspections as prescribed by current international laws and practices. According to VASEP, the concept of “animal products” has been expanded beyond the regulations in the Law on Veterinary Medicine.
Another criticism is that Article 3 of the Law on Veterinary Medicine places “preliminary processing” and “processing” into the same concept while both are inherently two concepts with very different connotations – a point in which the Law on Food Safety agrees as it specifies both processes as completely different from each other.
Nguyen Van Long, deputy director of the MARD’s Department of Animal Health (DAD), said that frozen goods are still in a high-risk group of products that could carry disease-causing microorganisms. The DAD is assigned by the MARD to quarantine animal products in accordance with the Law on Veterinary Medicine-related documents, while at the same time, inspecting the food safety of several traded items in accordance with the Law on Food Safety.
According to Long, his department agrees to let a specialised inspection agency examine food safety standards and quarantine imported items following the provisions of the laws. At the moment, businesses only have to perform one such quarantine and examination, which is to ensure convenience and reduce costs involved businesses.
The disruption of global supply chains has been creating opportunities and challenges for Vietnamese seafood producers. However, when VASEP announced its 10-per-cent growth target in seafood exports this year, the association may not have considered the effects from institutional reforms. From 2010 to 2020, the MARD issued four circulars guiding and regulating the quarantine of aquatic products. Ta Thi Van Ha, editor-in-chief for VASEP’s weekly seafood bulletin, found that the “list of imported aquatic products subject to quarantine became more and more expanded.”
According to Ha’s analysis, in the last decade, along with the replacement, amendment, and supplement of circulars, the expansion of that list has happened without any change in legal basis or international risk and disease reporting practices.
Another major criticism from involved experts is that the criteria for “disease” and “food safety” cannot be distinguished when a product is meant for human consumption. Most of the microbiological criteria specified in the circulars are food safety indicators that cause diseases to humans when ingested, not indicators of disease-causing pathogens that spread to aquatic animals. In other words, there is a confusion of concepts and duplicated content, which renders the amount of regulated goods too large.
Many countries do not require quarantine measures for frozen or cooked seafood products that come in sealed packaging. Most developed nations – such as the United States, the European Union, Japan, and Canada – only examine these products according to food safety criteria for processed seafood products.
According to VASEP, the government has been issuing resolutions on improving the business environment and reducing specialised inspections, with most of them assigning the MARD to reform and reduce the quarantine measures for frozen seafood. But during the last few years, the ministry continuously revised and supplemented circulars for imported seafood products and extended the list of high-risk goods subject to quarantine. A VASEP expert said that the expansion of the concept of animal products in the documents and the failure to clearly distinguish between the concepts of preliminary processing and processing is an important reason for the increase in the number of goods that are now subject to animal quarantine.
“However, the seafood industry could still achieve the set target of 10 per cent growth this year, and businesses can still avoid suffering additional losses, if the management regulations under the Law on Food Safety are effectively deployed,” the expert argued. “VASEP has no choice but to persistently propose to the government and relevant ministries – especially the MARD – to consider not expanding the quarantine list.”